If you're a small-business owner with most of your growth
ahead of you, one place you may want to go to finance your
expansion is back to school. At least that's the advice of Mark
Rice, professor of entrepreneurship at the Rensselaer Polytechnic
Institute's (RPI) Lally School of Management and Technology in
Troy, New York.

Rice, whose staid title belies his contribution to making
Rensselaer one of the powerhouse entrepreneurship schools in the
country, has seen the same scenario happen over and over again.
Young growth companies tap into the activity surrounding a
university and find themselves awash in the kinds of
resources--capital included--that help turn great ideas into great
companies.

"Creating an environment where companies can thrive
requires an important underlying fabric," Rice says. This
fabric consists of an active angel network, a source of technology
or new business ideas, a large number of entrepreneurs, a base of
professionals--such as lawyers, bankers, accountants and marketing
consultants--that understand entrepreneurial companies and are
prepared to assist them, and, finally, a state or local government
that maintains a pro-business stance.

Rice says universities are uniquely qualified to promote and
integrate these diverse elements, and as a result, they're
havens for entrepreneurs seeking capital as well as the technical
resources that are often part of a great success story.

David R. Evanson's newest book about raising capital is
called Where to Go When the Bank Says No: Alternatives for
Financing Your Business (Bloomberg Press). Call (800) 233-4830
to order. Art Beroff, a principal of Beroff Associates in Howard
Beach, New York, helps companies raise capital and go
public.

Off To College

To see just how fertile a university environment can be for
raising capital and promoting success, consider the story of
Michael Marvin, once an employee at RPI who ran the school's
manufacturing center and now an entrepreneur with several
successful ventures under his belt.

His tale dates back to December 1985, when four RPI students who
were completing an entrepreneurship class wrote the course's
required business plan. The quartet, who envisioned a company that
would create and distribute in-car navigation systems, approached
Marvin. Would he help them put the plan into action?

Marvin, who gravitated to the university because of its stable
of new business opportunities, anted up $12,000. The funds were
critical--they put the first breath into the company that was to
become MapInfo Corp., a mapping software company in Troy.

Marvin, who joined MapInfo's board, says that the RPI
"friends and family"--trustees, board members and
affiliated angels--immediately invested another $70,000. Six months
later, in June of 1987, investors within the university community
kicked in another $500,000, and one year later, yet another
$500,000. All told, as part of RPI's affiliate program that
allows off-campus companies to participate in various
university-sponsored programs, MapInfo raised nearly $1.1 million
in its own backyard.

But Marvin, who joined the company full time in 1987, says the
university's help didn't stop there. When MapInfo went
outside RPI to raise institutional venture capital, the movers and
shakers of the university who sat on the company's board added
a lot of weight. "They met with the investors and gave the
company a lot more credibility," says Marvin.

As a result, the company raised another $1 million in
institutional venture capital. Four years later, the company went
public, raising $26 million from a syndicate of underwriters led by
the technology investment banking firms BancBoston Robertson
Stephens and BT Alex. Brown Inc., with First Albany Corp. also
present to provide regional support. Today, MapInfo boasts annual
sales of more than $60 million.

While MapInfo was reaching critical mass, Marvin and RPI were
also nurturing Interactive Learning International Corp. (ILINC),
which was founded by RPI professor Jack Wilson and graduate
students interested in advancing distance learning (learning via
the Internet, videotapes, TV and other technologies). Research and
development for ILINC, which is also in Troy, began in 1992.
Marvin, who now had a seed fund called Exponential Business
Development Co. LP, with many in the RPI community as limited
partners, kicked in seed financing in 1995 and joined the
company's board.

Executives from a technology company touring RPI in 1996 learned
about ILINC and eventually became clients. This was followed by
several rounds of institutional venture capital funding and an
investment from Intel. In February, Marvin took the helm of ILINC
to help manage the company's rapid expansion.

Looking back, Marvin says it's been a wild ride, but one
made possible by the entrepreneurial momentum established by the
RPI community. More important, he says, "It's a path other
entrepreneurs can take to help themselves realize their
vision."

First Lesson

If you need help and feel that a university environment might be
right for you, your first task is to find the institution that best
fits your needs. Experts like Rice and Marvin suggest that not
every educational institution is capable of delivering the
assistance you need. In particular, they say you should focus your
energy on working with a university that has an entrepreneurship
program. The different mindsets at schools teaching
entrepreneurship are subtle but important. At most universities,
for instance, professors prepare students to join a company as an
employee after graduation. At schools with entrepreneurship
programs, you'll find professors and students preparing to
build businesses.

Even schools with fledgling entrepreneurship programs are worth
checking out. For instance, Bob Tosterud, chair of the Council of
Entrepreneurship Chairs, a group of business schools with endowed
entrepreneurship chairs, says entrepreneurship is a hot topic in
universities these days. "People who are hired by schools to
cultivate entrepreneurship chairs are often highly qualified and
have lots of contacts in business and academia," says
Tosterud. "I recommend calling any university nearby, and if
they have even a rudimentary entrepreneurship program, schedule an
appointment to talk to the person running it."

Marvin also advises that if you want to approach a university
for funding, keep in mind that they offer many ports of entry.
"Go in as many doors as possible," he says, "but
don't stay anywhere too long if it doesn't look
productive."

For instance, a school like RPI that has a hyperactive
entrepreneurship program might have affiliate programs in which
companies off campus can get involved; they may also have
SBA-sponsored Small Business Development Centers, alumni outreach
programs, campus networking events, business incubators,
manufacturing assistance centers or entrepreneurial resource
centers that can be beneficial. In addition, try approaching
professors, deans, executive directors and even students. With
ILINC and MapInfo, for instance, Marvin says the companies got
their strongest support and best contacts from alumni.

When going the university route, keep the many people you meet
along the way apprised of your progress. Remember, schools are
political. They need to be able to share credit for your success,
which strengthens the entrepreneurial fabric for those who will
follow you.

Next Step

You can find a list of top entrepreneurship programs and gain
some framework for evaluating them by reading "Measuring
Progress in Entrepreneurship Education" in the Journal of
Business Venturing, published by Elsevier Science. Call (800)
282-2720 for a reprint of this article, which appeared in Issue 12
of the publication, pages 403-421. The cost is approximately
$45.

Contact Sources

Council of Entrepreneurship Chairs, University of South
Dakota School of Business, 414 E. Clark St., Vermillion, SD
57069